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Showing 421 to 440 of 839 Records
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2020 (6) TMI 419
Commercial or industrial construction service - service tax liability of the sub-contractor - mis-statement of facts or not - extended period of limitation - HELD THAT:- The matter stands decided on merit in favour of the Department vide the decision of this Tribunal’s Larger Bench in the case of COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. [2019 (6) TMI 518 - CESTAT NEW DELHI] herein it has been held that in the scheme of service tax the every individual service provider need to discharge his service tax liability and since the scheme of Cenvat credit is very much available to all the service provider as per the chain of events, the credit of the service tax paid by the sub-contractor can be availed by the principal service provider.
Extended period of limitation - HELD THAT:- Since the issue has been under dispute and there have been several interpretation regarding the service tax liability of the sub-contractor where the main contractor has paid the service tax on the entire value of the service. It cannot be alleged that there have been element of fraud, collusion, willful mis-statement or suppression of acts with an intent to evade service tax, the demand in such circumstances can only be confirmed for the normal period of demand as provided under Section 73 (1) of the Finance Act, 1994.
Insofar as the demand of the service tax on merit is concerned, the appeal of the appellant is dismissed, however, the period of demand need to be restricted on the normal period of demand as per the Section 73 (1) of the Finance Act, 1994 - appeal allowed in part.
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2020 (6) TMI 418
Demand of service tax - amount earned for executing corporate guarantee in favour of their sister - non imposition of penalty for the preferential location charges recovered from the flat owners - Revenue alleges that the such activity is taxable under Banking and Finance Institution Services whereas the appellant is contesting that they are not liable to pay service tax on the said activity as they have not received any consideration for providing corporate guarantee to various banks on behalf of their associates - HELD THAT:- It is an admitted fact that the appellant has not received any consideration from either from the financial institutions or from their associates for providing corporate guarantee, in that circumstances, no service tax is payable by the appellant. Moreover, the demand raised in the show cause notices are on the basis of assumption and presumption presuming that their associates have received the loan facilities from the financial institution at lower rate, therefore, the differential amount of interest is consideration, but there is no such evidence produced by the revenue on that behalf.
The appellant is not liable to pay any service tax on corporate guarantee provided by the appellant to various banks/financial institutions on behalf of their holding company/associate enterprises for their loan or over draft facility under Banking and Financial Institutions after or before 01.07.2012 - the demand of service tax on corporate guarantee provided by the appellant is set aside.
Imposition of penalty - HELD THAT:- The charges leviable on account of prime location charges etc., the appellant has already paid service tax along with interest before issuance of the show cause notice. Therefore, in terms of Section 73(3) of the act, the proceedings were not required to be initiated against the appellant, therefore, penalty imposed on the appellant is set aside.
Appeal allowed - decided in favor of appellant.
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2020 (6) TMI 417
Classification of goods - Light Diesel Oil (LDO) - it was held by Tribunal that While it is wrong to test the product LDO against the parameters prescribed in IS 1460:2000 which applies solely to HDO after 2008, it is seen that the test reports of the appellant do not cover a large number of parameters prescribed in IS 1460:2000. The same also applies to the parameters available in IS 15770:2008.
HELD THAT:- The appeal is without any merits - appeal dismissed.
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2020 (6) TMI 416
CENVAT Credit - manufacture of taxable as well as exempt goods - iron ore fines - period April 2015 to June 2016 - Rule 6 (3) of the Cenvat Credit Rules, 2004 - HELD THAT:- The issue is no longer res-integra as it has already been decided in several decisions of this Tribunal that iron ore fines which emerges during the course of manufacture of sponge iron ore are in unavoidable and inevitable by-product and therefore same does not fall under the category of manufacture goods and accordingly same are not excisable. Thus, such goods cannot be considered as exempted goods and provisions of Rule 6 of the Cenvat Credit Rules, 2004 are not applicable - reliance can be placed in the case of CCE, RAIPUR (CG.) VERSUS M/S. SARDA ENERGY AND MINERALS LTD. [2013 (12) TMI 859 - CESTAT NEW DELHI].
Appeal allowed - decided in favor of appellant.
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2020 (6) TMI 415
Release of detained goods alongwith truck - section 130 of GST Act - HELD THAT:- We should not interfere at the stage of adjudication of the confiscation proceedings under Section 130 of the Act. The adjudication proceedings shall proceed in accordance with law. However, we are inclined to grant some relief to the writ applicant so as to protect the goods getting damaged, but at the same time keeping in mind the interest of the State also. We direct the writ applicant to deposit an amount of ₹ 4,20,000/- towards tax and penalty with the authority concerned and also furnish a bank guarantee to the tune of ₹ 22,00,000/- of any Nationalized bank. We are asking the writ applicant to furnish the bank guarantee keeping in mind the value of the goods.
On deposit of ₹ 4,20,000/- towards tax and penalty along with the bank guarantee of ₹ 22,00,000/- of any Nationalized bank, the authority concerned shall release the goods and the vehicle at the earliest. The deposit of bank guarantee shall abide by the final outcome after adjudication - Application disposed off.
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2020 (6) TMI 414
Grant of Anticipatory Bail - evasion of GST - bogus invoices of sales and purchases - HELD THAT:- The allegations are that the petitioner forged and fabricated the documents to avoid the tax liability. All the documents are already in possession of the police. Whether the petitioner had any role to play in the entire gamut or he has been made scapegoat, as alleged, can be ascertained once the petitioner joins the investigation vis a vis the documentary evidence already seized.
The petitioner is ordered to be released on anticipatory bail on his furnishing bail bonds and surety bonds of local and sound surety, to the satisfaction of Chief Judicial Magistrate/ Duty Magistrate, Chandigarh, subject to his complying with provisions contained in Section 438(2) Cr.P.C. - Petition allowed.
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2020 (6) TMI 413
Allowable revenue expenditure - expenditure on conversion of interest payable to financial institutions, banks into 10% redeemable preference shares - HELD THAT:- Substantial question of law No.1 is covered by decisions of this court as well as Delhi High Court in case of ‘KIRLOSKAR ELECTRIC CO. LTD VS. CIT [1997 (7) TMI 109 - KARNATAKA HIGH COURT], ‘COMMISSIONER OF INCOME TAX V. RATHI GRAPHICS TECHNOLOGIES LTD. [2015 (8) TMI 376 - DELHI HIGH COURT]and answered against the revenue.
Allowable as expenditure when the interest had been written off - HELD THAT:- Question framed in this appeal is squarely covered by a decision in JINDAL VIJAYANAGAR STEEL LIMITED. [2011 (8) TMI 1334 - SC ORDER] which is answered against the revenue. The aforesaid statement could not be disputed by learned counsel for the revenue.
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2020 (6) TMI 412
Application for stay - HELD THAT:- Petitioner was not advised properly in seeking stay of the demand by submitting an application Ext.P3 dated 18th of March 2020 as it is post the issuance of garnishee notice dated 6th of March 2020. In fact, an application for stay or simple prayer for stay along with the pending appeal ought to have been preferred before the 2nd respondent.
Be that as it may, the petitioner has undertaken to file the application for stay and as there is lock down owing to the COVID 19, pandemic, grant three weeks time to the petitioner to file the application for stay before the 2nd respondent. In case such application is filed, the 2nd respondent would decide the application for stay within one month thereafter, after affording an opportunity of hearing to the parties and in accordance with law. Till such time, notice Ext.P5 dated 6th of March 2020 is ordered to be kept in abeyance. It is made clear that the interim stay is till the disposal of the interim application and not beyond.
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2020 (6) TMI 411
Notice u/s 143(2) issued electronically to the petitioner firm - petitioner did not respond to the notices issued u/s 142(1) of the IT Act - contention of petitioner that the Partner of the petitioner, who has filed the writ petition, is an illiterate person not having computer knowledge and at the time of filing the first income tax return of the firm, he had given mobile number and mail address of the son of another partner for primary communication and has given auditor’s mobile number and mail address for secondary communication - earlier notices which were received by the son of the other partner had not been forwarded by the said individual to the petitioner because of which, there was a delay in responding to the notices issued - whether 3rd respondent completed the assessment for the assessment year 2017-18 in a hurried manner depriving the petitioner of opportunity to file objections though there was ample time till 31.12.2019 for him to complete the assessment? - HELD THAT:- Prima facie, we are of the opinion that the action of the 3rd respondent is arbitrary as he ought to have granted time till 20.12.2019 to the petitioner to file objections and documents.
Accordingly, the impugned assessment order dated 15.12.2019 issued by the 3rd respondent is set aside and the matter is remitted back to the 3rd respondent to pass a fresh order in accordance with law; and the petitioner is granted two weeks time from the date of receipt of a copy of this order to file objections and documentary evidence in support of his contentions before the 3rd respondent, which shall be considered by the 3rd respondent before he passes a fresh order. WP allowed.
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2020 (6) TMI 410
Assessment u/s 153 OR 147 - unexplained cash credits u/s 68 - HELD THAT:- On the strength of the information received from the ADIT, INV, the Assessing Officer assumed jurisdiction u/s 148 of the Act and accordingly, statutory notices were issued and served upon the assessee.
Since the documents were found at the premises of the searched person, they did not belong to the assessee and the transactions recorded in the seized documents were in the books of the searched person and, therefore, information received from the Investigation Wing was a tangible material evidence which prompted the Assessing Officer to initiate proceedings u/s 148 of the Act.
P rovisions of section 153C of the Act do not apply on the facts of the case in hand, and therefore, jurisdictional issue challenged by the assessee does not hold any water.
Addition u/s 68 - Direct and clinching evidences cannot be brushed aside lightly. The entire additions have been made on surmises and assumptions revolving around the statement of one Shri Devi Das Tikamdas Chattani ignoring the fact that the director of M/s Index Securities and Research Pvt Ltd alongwith major share holder Shri Sant Lal Aggarwal appeared before the Assessing Officer. Financials were available with the Assessing Officer. AO/CIT(A) should not have discarded the evidences. In our considered opinion, the assessee has successfully discharged the onus cast upon it u/s 68.
Addition u/s 69C - Addition is directly related to the loan amount as the same is interest paid by the assessee to the company and the same is also directed to be deleted. Before closing, it can be seen from the confirmation exhibited elsewhere that the loan was taken on 11.09.2009 and within three months, the loan was repaid. All the transactions have been done through banking channel.
Cash loans given to the assessee - Foundation of the impugned addition is the statement of Shri Devi Das Tikamdas Chattani. Except for that, there is no direct evidence brought on record to show that any cash transactions took place between the assessee and the said person.
Assessing Officer never confronted Shri Devi Das Tikamdas Chattani to Shri Sant Lal Aggarwal. If the statement of Shri Devi Das Tikamdas Chattani is to be believed, then on the same facts, statement of Shri Sant Lal Aggarwal cannot be ignored or brushed aside lightly. Merely because the statement of Shri Sant Lal goes in favour of the assessee, cannot be a reason to disbelieve the same. As mentioned elsewhere, there is no direct evidence brought on record which could suggest that some cash transactions took place between the assessee and the searched person. The observations made by the Assessing Officer at page 25 of the assessment order clearly show that the entire addition has been made on surmises and conjectures.
Considering the facts of the case in hand, in the light of statement of Shri Sant Lal Aggarwal, we do not find any merit in the impugned addition and the same is directed to be deleted.- Assessee appeal allowed partly
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2020 (6) TMI 409
Disallowance of ESOP expenses - HELD THAT:- As decided in own case [2016 (7) TMI 1486 - DELHI HIGH COURT] and [2017 (2) TMI 1399 - DELHI HIGH COURT] deciding the issue in favour of the assessee in the said case where the addition made by the Assessing Officer by way of disallowance of the expenses debited as cost of ESOP in profit and loss account was deleted by the Income-tax Appellate Tribunal.
Disallowance of software expenses - Revenue or capital expenditure - HELD THAT:- The assessee has been allowed the identical claim in earlier years by the CIT(A) and based on that decision the ld DRP was also of the view that the above expenditure incurred by the assessee is revenue in nature. The ld DR could not controvert that why the order of the ld DRP is erroneous. In view of this we do not find any infirmity in the direction issued by the ld DRP. In the result we confirm the direction of the DRP.
TDS u/s 194H - Disallowance of commission expenditure under section 40 (a) (ia) - sale of advertisement time on its various channels, this advertisement time is sold generally through advertisement agencies - HELD THAT:- As decided in assessee's own case for assessment year 2009 – 10 [2017 (7) TMI 867 - ITAT DELHI] referring to issue is of treatment of commission paid to the advertising agencies AO is directed to not to make this addition in the assessment order.
Expenditure on obtaining license for use of accounting software - revenue or capital expenditure - HELD THAT:- This issue has already been decided while deciding the appeal of the revenue wherein following the order of the coordinate bench for assessment year 2009 – 10 [2017 (7) TMI 867 - ITAT DELHI] the software expenditure disallowed by the learned assessing officer deleted. Therefore this ground of appeal of the assessee deserves to be allowed. Even otherwise the assessee has not purchased the software but has purchased the license to use this software for its accounting purposes. That is not capital expenditure but revenue expenditure. In view of this ground of the assessee is allowed.
TPA - ALP of the corporate Guarantee - non making reference to the TPO - HELD THAT:- In view of the M/S. S.G. ASIA HOLDINGS (INDIA) PVT. LTD. [2019 (8) TMI 661 - SUPREME COURT] guidelines issued by the CBDT in Instruction No.3/2003 the Tribunal was right in observing that by not making reference to the TPO, the Assessing Officer had breached the mandatory instructions issued by the CBDT. Thus restore the matter back to the file of the learned assessing officer so that appropriate reference could be made to the TPO.
Disallowance u/s 14A - HELD THAT:- As there is no exempt income is received or receivable during the relevant previous year in the case of the assessee for this year, the disallowance under section 14 A cannot be made.
Disallowance being the transmission and uplinking charges paid by invoking the provisions of section 40 (a (ia) - HELD THAT:- As in own case for AY 2009 – 10 [2017 (7) TMI 867 - ITAT DELHI] we direct learned assessing officer to delete the disallowance on account of non-deduction of tax at source on Transmission and uplinking charges.
Re characterizing of income - the income declared by the appellant as capital gain pursuant to sale of 212500 shares of M/s Astrao Awani Networks Limited as income from other sources and making an addition - HELD THAT:- The CBDT circular dated 2/5/2006 speaks about the characterisation of income from transaction in listed securities as well as unlisted securities.
In the present case before us the learned assessing officer could not prove that any of the three conditions mentioned in that circular applies. In fact the sale price of the shares is supported by the valuation report and also conform with provisions of FEMA. The learned assessing officer as well as the learned CIT – A merely proceeded on the basis of an allegation that assessee wanted to show the higher profit in its books of account. It is not denied that the assessee was the owner of the shares, it held it for 13 months, there is no allegation that the price paid by the buyer was unfounded. In fact it was supported by the valuation report which was not controverted , except the conjectures and surmises.
In view of this circular, we hold that the excess of consideration realised by the assessee on sale of the above shares is chargeable to tax as capital gain and not as income from other sources. In view of this ground number nine of the appeal of the assessee is allowed.
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2020 (6) TMI 408
Addition of difference in total sales made during the year and total cash deposits u/s 68 - assessee has failed to explain the source of cash deposits in the bank account - plea taken by the appellant that purchases in the individual capacity were also routed through the HUF and accepted by CIT(A) - HELD THAT:- A.O. in the assessment order has also mentioned the same details of the purchases as per the Trading A/c of the assessee and again compared with the bank statement and ultimately on the difference with regard to purchases, applied the G.P. rate of 0.80% for making the addition. Thus, the crux of the matter had been that the A.O. accepted the sales and purchases disclosed by the assessee in the Trading A/c. A.O. has also accepted profit declared by the assessee.
A.O. with regard to the unexplained purchases applied the G.P. rate for the purpose of making the addition, but, with regard to sales without comparing with the bank statement made the addition of the entire amount in question. Thus, there is a difference in the opinion of the A.O. with regard to the same matter in issue as regards sales and purchases. CIT(A) on examination of the record, accepted the explanation of assessee that purchases and sales made by assessee of other connected parties since routed through the bank account of the assessee, therefore, could not be treated as sales and purchases of the assessee.
Even if there was some excess sales declared by the assessee, the entire sales could not have been treated as unaccounted income of the assessee. As against the undisclosed or unaccounted sales, only profit rate should have been applied to make the addition. We are fortified in our view by Judgment of Hon’ble Gujarat High Court in the case of CIT vs., President Industries [1999 (4) TMI 8 - GUJARAT HIGH COURT] and in the case of CIT vs., Bal Chand Ajit Kumar [2003 (4) TMI 76 - MADHYA PRADESH HIGH COURT].
No material is produced before us to rebut the finding of fact recorded by the Ld. CIT(A) that the transaction in the individual capacity were also routed through assessee HUF and are recorded in the books of account and sales and purchases have not been disputed by the A.O. Therefore, no interference is called for in the matter.
Addition on account of applying G.P. Rate - difference in the purchases as the assessee has failed to explain the source of cash deposits in his bank account during the assessment proceedings and no such proof was filed - HELD THAT:- Since the purchases recorded in the books of account have not been disputed by the A.O, therefore, there is no question of making such addition against the assessee. The explanation of assessee that other purchases were also routed through the account of the assessee, have not been disputed by the Revenue. Therefore, no interference is called for in the matter. Accordingly, Ground No.2 of the appeal of the Revenue is dismissed.
Ad-hoc disallowance of expenses - assessee has claimed shop expenses, labour charges, printing and stationary, and travelling expenses - assessee did not produce complete vouchers - HELD THAT:- A.O. has not pointed out as to which of the vouchers of the expenditure have not been produced by the assessee. No details of the amount has also been mentioned. Therefore, disallowing 1/5th of the expenditure claimed of the assessee would amounts to adhoc addition which cannot be sustained in law.
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2020 (6) TMI 407
Reopening of assessment u/s 147 - undisclosed income from bank accounts addition(s) - Assessee was one of the beneficiaries of M/s Ambrunova Trust and made investment in LGT Bank - proportionate share of benefit - HELD THAT:- There is no material evidence coming from the departmental side that the corresponding twin trusts deeds have formed part of records which could even remotely indicate that these assessees are beneficial owners of the trusts’ assets to the extent of 1/5th share each as on 31.12.2001 we quote Mukesh Kumar Gupta vs. Commissioner of Income Tax [2013 (4) TMI 444 - ALLAHABAD HIGH COURT] that such a re-opening initiated beyond a period of four years from the end of the relevant assessment year is not sustainable in absence of the specified amount of taxable income having escaped assessment being recorded in reopening reasons
There is further no quarrel that sec. 5(1)(a-c) defines total taxable income in case of a resident that the income which is received or deem to be received in India, accrued or arise or is deem to accrue or arise in India and accrues or arises to him outside India during such year. We reiterate that learned lower authorities have assessed these two assessees qua the overseas trust’s balance amount to the extent of 1/5th share each u/s 5(1)(c) only.
The clinching aspect of the trust deeds nowhere forming part of records that there is no cogent material indicating the assessees as having 1/5th share each in the trusts’assets. And also as to whether the trust deeds herein pin-point the trusts as discretionary or specific ones and whether the balance amount therein was to devolve upon them in a vested or contingent manner. We note that once the Assessing Officer has himself not suggested that the impugned sums have been in fact accrued or arisen to them, thus that the department’s impugned action adding the trust’s balance in these two taxpayers’ hands does not deserve to be concurred with. The Assessing Officer’s re-opening reasons nowhere allege that these assessees had any right to receive the alleged 1/5th shares as well.
We wish to make it clear that our foregoing detailed discussion sufficiently proves in absence any material on record, these two assessees did not have right to receive the alleged 1/5th share each in the trust’s balance.
We observe in view of the foregoing detailed discussion that both the lower authorities have erred in law and on facts in initiating sec. 148 /147 proceedings against these two assessee - Decided in favour of assessee.
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2020 (6) TMI 406
TDS u/s 195 - non-deduction of tax at source on guarantee commission paid to lease plan Corporation NV Netherland - addition u/s 40 (a)(i) - ‘Fees For Technical Services’ as well as ‘Interest’ as per the article 11 and 12 of The Double Taxation Avoidance Agreement [ DTAA] between India and Netherland - HELD THAT:- In the present case apparently, AE has not provided any capital to the appellant on which income is earned. It is a corporate guarantee , being a surety to the lender bank of the appellant that, if in a case, in future, the appellant fails to pay the due amount owed to those lenders, the Netherland Company will pay to those lenders. Thus, there was promise to reimburse the amount to those lenders on happening of an event i.e. failure of payments by the appellant of the dues owed to the lenders and lenders invoking the guarantee issued by the Netherlands company in favour of those lenders. Therefore it needs to examine whether there is any provision of capital by the Netherland Company to Indian Company appellant, answer is in negative.
There should be a “debt claim and ‘form’ such claim income should arise to qualify as ‘interest’. Thus the word ‘debt claim “predicate the existence of debtor – creditor relationship [lender – borrower]. That relationship can arise only when there is a provision of capital. In view of this, we hold that guarantee fee paid by the assessee to Netherlands company, in the above facts, cannot be covered in the definition of interest as per Article 11 of The DTAA..
Whether such guarantee fee can be Fees for technical services within compass of Article 12 (5) of the DTAA? - The ld CIT (A) has held it to be a ‘Consultancy services’. In fact we are of the view that Provision of Guarantee is a service provided by the Netherlands Company to the assessee. US Court decision relied up on by the ld AR also says that provision of Guarantee is a ‘service”. But is it a consultancy service or not needs to be examined.
Looking to the nature of ‘Service’ provided by the Netherlands company in providing guarantee, it is a financial service and can by no stretch of imagination is called a ‘Consultancy services. Even otherwise, it does not cross the threshold of ‘make available’ in 12 (5) (b) of the DTAA. Therefore we also hold that, provision of Guarantee fees service is not fees for Technical services under article 12 of The DTAA.
AR has also said that guarantee Fees is not chargeable to tax under Article 7 in absence of any permanent establishment of the Netherlands company. We fully agree with that as the revenue has not at all invoked article 7 in this case.In view of this, we hold that assessee is not require, Orders of lower authorities are reversed and ld AO is directed to delete the disallowance for both the years. - Decided in favour of assessee.
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2020 (6) TMI 405
Deduction u/s 80P disallowed - AO has disallowed the claim for deduction u/s 80P of the Act holding that the assessee would be hit by sec.80P(4) - it is the contention of the assessee that the assessee is carrying on money lending activity mainly with its Members and hence it cannot be categorized as Bank as held by the Assessing Officer - HELD THAT:- A.R submitted that there are decided cases on this issue in favour of the assessee. Further, the quantum of interest income to be taxed under other sources has also been decided by the Hon'ble Karnataka High Court in the case of Totgar Co-operative Sale Society Ltd. [2008 (9) TMI 493 - KARNATAKA HIGH COURT]
In view of above said legal developments, we feel it appropriate to restore all the issues to the file of the Assessing Officer for examining them afresh in the light of various decisions rendered by Hon'ble High Court and Hon'ble Supreme Court.
Accordingly, we set aside the orders passed by the CIT (Appeals) in all the three years under consideration and restore them to the file of Assessing Officer for examining them afresh. Appeals filed by the assessee allowed for statistical purposes
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2020 (6) TMI 404
Disallowance of Provision for Non-performing assets (NPA) u/s 36(1)(viia) - AO denied the assessee’s claim as assessee makes the provision under surmise and assumption that the debt will be bad in future and when it is actually lost, it claims it as bad debts written off and that is allowed, but no provision on unascertained liability can be allowed as a legitimate deduction from Income under the Act - HELD THAT:- As decided in SREI Infrastructure Finance Ltd. [2020 (1) TMI 490 - ITAT KOLKATA] the issue is squarely covered against the assessee by the decision of Apex Court in Southern Technologies Ltd. [2010 (1) TMI 5 - SUPREME COURT]. Respectfully, following the decision of Apex Court in Southern Technologies Ltd. (Supra), we dismiss the ground raised by the assessee.
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2020 (6) TMI 403
Long term capital gain - year of assessment - double taxation - HELD THAT:- Assessee had already paid the taxes on long term capital gain(LTCG) in preceding years viz:2004-05, 2005-06, and 2006-07, and therefore the assessee need not to pay the taxes on the same income again in assessment year 2012-13. The taxes should not be imposed except by authority of law, that is the Department does not have power to impose tax twice on the same income and therefore, based on the factual position narrated above, the addition made by the assessing officer under the head business income needs to be deleted, accordingly we delete the addition - Decided in favour of assessee.
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2020 (6) TMI 402
Penalty u/s 271(1)(c) - Disallowance of claim for long-term capital gain arising from the sale of shares of Jackson Investment Limited by treating the same as bogus - as per assessee no specific mention in the show-cause notice issued under section 274 for the year under consideration by the authorities below as to whether the assessee is guilty of having “furnished inaccurate particulars of income” or of having “concealed particulars of such income”- HELD THAT:- Notice issued under section 271(1)(c) without specifying which of the two contraventions, the assessee is guilty of was defective and the penalty imposed in pursuance of such defective notice was not sustainable. See BIJOY KUMAR AGARWAL [2019 (6) TMI 721 - CALCUTTA HIGH COURT] and M/S MANJUNATHA COTTON AND GINNING FACTORY & OTHS., M/S. V.S. LAD & SONS, [2013 (7) TMI 620 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2020 (6) TMI 401
Addition u/s 41(1) or u/s 28 - waiver of working capital loan - assessee had received the benefit as a result of one time settlement of loan by the Indian Overseas bank. The assessee was due to Indian Overseas Bank, Visakhapatnam in respect of term loan & OCC which included the interest subsidy as well as the working capital loan - Addition deleted by the Ld.CIT(A) - HELD THAT:- In the instant case, the trading liability or the expenditure or deduction was claimed by the assessee in respect of interest paid on the OCC loan. In respect of principal amount, though the assessee has gained the benefit by way of one time settlement the same cannot be brought to tax u/s 41(1) because the OCC loan represents the principal which was never claimed as expenditure. AO also did not make out a case that the principal amount was debited to the Profit & Loss account in the earlier years. Therefore there is no case for making addition u/s 41(1) in respect of the principal amount.
In MAHINDRA AND MAHINDRA LTD. THRG. M.D. [2018 (5) TMI 358 - SUPREME COURT] considered the issue with regard to taxing the remission of liability u/s 28(iv) and decided the issue against the revenue and in favour of the assessee, since, the receipt was in the nature of cash or money. The Hon’ble Supreme Court held that section 28(iv) has no application since the receipt was in the nature of cash or money. In the instant case what the assessee has received was remission of liability which was in the form of cash or money and the difference amount of principal which was settled by onetime payment was never debited to Profit & Loss account. Therefore, the decision of Hon’ble Supreme Court is squarely applicable in the instant case.The appeal of the revenue is dismissed.
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2020 (6) TMI 400
Reopening of assessment u/s 148 - interest paid on the service tax by considering the revised return of income - HELD THAT:- After 1st April, 1989, the AO has power to re-open, provided there is "tangible material" to come to the conclusion that there is an escapement of income from assessment. Reasons must have a live link with the formation of the belief. In the present case, the assessee has claimed interest on service tax paid as allowable deduction relates to the present A.Y. 2011-13, for that purpose he filed revised return, the same is examined by the AO and completed the assessment u/sec. 143(3), therefore the AO has already firmed opinion that the deduction claimed by the assessee is allowable deduction and accordingly allowed.
Subsequently, on the basis of very same revised return and on the very same claim the Assessing Officer came to a conclusion that the expenses claimed by the assessee relates to the earlier year i.e. A.Y. 2011-12 and not relating to the assessment year under consideration, in our opinion is merely a change of opinion and is not permissible in the case of M/s.Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT]. We, are of the opinion that reopening of assessment is not valid, therefore notice issued by the Assessing Officer has to be quashed. No infirmity in the order passed by the ld. CIT(A).
So far as merits of the case is concerned, CIT(A) gave a finding by following the judgment of Andhra Sugars Ltd. [2015 (2) TMI 810 - ANDHRA PRADESH HIGH COURT] that whether service tax paid has to be allowed in the year of payment or irrespective of the year allowablility incurred.
CIT(A) by following the decision of the Hon'ble Jurisdictional High Court in the case of Andhra Sugars Ltd. (supra) deleted the addition made by the Assessing Officer. We find no reason to interfere with the order passed by the ld. CIT(A). Thus, this appeal filed by the Revenue is dismissed.
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9911796707
